Asian stocks declined following an overnight slide in US equities after President Donald Trump replaced his Secretary of State Rex Tillerson with CIA Director Mike Pompeo, extending a shake-up of his administration, spurring concerns about a one-sided approach to international trade.

The 30-share index dropped 166.17 points or 0.49 per cent to 33,690.61. The gauge had lost 61.16 points in the previous session.

Similarly, the NSE Nifty fell 37.90 points or 0.36 per cent to 10,388.95.

Sectoral indices led by metal, PSU, realty, oil & gas, auto, power and bank stocks were trading in the negative zone, falling up to 0.87 per cent.

Banking shares such as SBI, ICICI Bank, Axis Bank, Bank of India, Yes Bank, Andhra Bank and Canara Bank also declined up to 2.30 per cent.

However, TCS, Infosys, Maruti Suzuki, Dr Reddy's, L&T and Asian Paints trading in the green, gaining up to 0.74 per cent.

PNB stocks fell 4.23 per cent to Rs 93.85 after reports that the bank's exposure to alleged fraud may be over $2 billion.

Shares of Gitanjali Gems cracked 4.90 per cent to Rs 13.60 after National Stock Exchange (NSE) levied penalty on the company for failure to file financial results for quarter-ended 31 December.

Brokers said that the sentiment remained negative on weak trend in other Asian markets following a drop in Wall Street as US President Donald Trump replaced his secretary of state, and plans to impose new tariffs on China.